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On Wednesday, Berenberg issued an update on Swedish Orphan Bio (SOBI:SS) (OTC: SWTUY), adjusting the company’s price target to SEK360 from the previous SEK400 while reaffirming a Buy rating on the stock. Analyst Harry Gillis cited several factors influencing the new price target, including prevailing macroeconomic headwinds and currency fluctuations.
Gillis noted that Sobi, which operates within the rare disease pharmaceutical sector, presents an attractive investment proposition despite the current economic challenges. He highlighted the company’s potential for high single to low double-digit revenue growth, a minimal impact from patent expirations, and low risk from binary catalysts. The analyst pointed out that the rare disease market is typically more defensive due to the serious nature of the conditions treated and the limited availability of treatment options.
The revision in the price target reflects a 17% year-to-date decline in Sobi’s share price, which has been affected by concerns over potential U.S. pharmaceutical tariffs and issues surrounding Beyfortus, a product in Sobi’s portfolio. Gillis believes the concerns around Beyfortus are largely unwarranted.
Furthermore, the report touched on the impact of foreign exchange rates, which are now expected to pose a 5% revenue headwind by 2025, contrasting with the previously forecasted 3% revenue growth. This anticipated foreign exchange impact has led to a 12% reduction in the 2025 earnings per share (EPS) forecast.
In conclusion, while reiterating the Buy rating, Gillis adjusted the price target to SEK360 to account for the uncertainties related to tariffs, the sector’s de-rating, and the foreign exchange challenges.
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